How we value it

Our own estimate of what a share is worth, from the company's public filings and its own price history. Not a vendor's number, not an analyst's target.

Four simple models. Each asks the same question: what would the shares be worth if the market paid the same multiple it has paid this company over its own past years? Every model uses only the last four reported quarters and the company's own past fiscal years, up to five.

1. Earnings. Earnings per share over the last twelve months, times the median price-to-earnings multiple the shares carried at each past year-end. Loss years are left out; the multiple is kept between 8 and 60.

2. Cash flow. Free cash flow per share, times the median price-to-free-cash-flow multiple, with the same guard rails.

3. Sales. Revenue per share, times the median price-to-sales multiple. This one is here for a company whose earnings are temporarily thin.

4. Growth. A short discounted cash flow: this year's free cash flow, grown for five years at the company's own revenue growth rate (capped at 25% a year), then 3% a year for good, all discounted at 10% a year and divided by today's share count.

Putting them together. A model is dropped when its input is missing or negative. Fair value is the plain average of the models that remain; the range is the lowest and the highest of them; "3 of 4 models" tells you how many were used. A name with fewer than two usable models gets no fair value: one model is a guess, not an estimate. Index funds get none either; they are baskets, not companies.

A worked example. A company earns $10 a share and its shares have traded at a median 25 times earnings: the earnings model says $250. Free cash flow is $9 a share at a median 28 times: $252. Sales are $60 a share at 4.5 times: $270. The growth model says $300. Fair value is the average, $268, with a range of $250 to $300, 4 of 4 models. At a price of $200 the shares are 25% under: buy. At $260 they are close: hold. At $320 they are 19% over: trim.

The lines. Buy when the price is 20% or more under fair value. Hold otherwise, and we say how far above or below. No view when our four models disagree more than 3 to 1: the average of numbers that far apart means nothing. We retired "Trim" on Sep 15, 2026: from 2022 to 2026, names far above our estimate went on to beat the market as often as everything else, so the label carried no information. Our Buys beat the market at 12 months 85% of the time on 34 scored answers, against 66% for buying anything in this group and 69% for a plain 20%-off-the-high rule, and most of that came from the 2022 selloff. Hold that against us. For an index fund: buy on a dip of 5% or more from its 52-week high, otherwise hold.

How often it updates. Once a day, with the rest of the card, at 9:50 ET. The price moves the answer every day; the statements behind it move when the company files a new quarter.

What is not in it. No analyst targets, no vendor fair value, no management guidance, no news, no macro view, and no opinion of ours about the business. It does not know what you paid or what you hold. A company with losses or negative cash flow, or one too young to have several years of statements, may get no fair value at all, and we say so rather than guess.

Whose number this is. Ours. Every input is a public filing or a public price, and the arithmetic is above, in full. It is our own estimate, not a vendor's. When a fair value looks wrong to you, the models are the place to argue: hello@dipbell.com, we read every one.

General market commentary, not individualized advice. Every line here is the same for every reader. Your account, cost basis, taxes and risk tolerance differ; consult your own adviser before acting. Options can lose more than the premium collected.